Auto chiefs take the European route for brand push

File photoWhile Prime Minister Narendra Modi is trying to bring the world to India through the Make in India initiative, promoters of Indian automotive companies are relocating out of the country and increasingly spending time in overseas bases, especially Europe, to grow their brands on the global stage.

Eicher Motors Chief Executive ​Siddhartha Lal is the latest among second-generation business leaders who have shifted abroad. He is seeking to broaden the market for Royal Enfield motorcycles. From London, he hopes to focus on its R&D work and maintain close contact with advanced markets where Lal feels it is crucial for the mid-size bike maker to build a strong brand presence.

"Our philosophy is that we would rather be No. 1 for a few people than No. 2 for lot of people ... We want to create a brand slowly over time in other markets in the world," he had said in an interview to ET. "The first half of my career — from 2000 to 2015 — was spent building a brand in India. So the next half of my career, maybe for the next 15 years, should be spent building a global brand," he had said.

Sunjay Kapur, chairman of the Sona Group, divides his time between India and Germany, where the company has three factories. "I spend about a week and half to two weeks in Germany every month. As much as 60% of our revenues come from German operations currently," he said. German auto major VW Group is his largest customer.

Amtek Auto is another auto component maker that has a significant presence in Germany. Promoter Arvind Dham's son Anubhav Dham spends quality time in Germany, industry insiders said. The company didn't respond to an email seeking comment until press time Friday.

At Samvardhana Motherson Group, Chairman Vivek Chaand Sehgal, who holds an Australian passport, and son Laksh Vamaan Sehgal spend better part of the year trotting the globe. "Both of them spend a lot of time in various countries meeting customers with focus on relationship management. They spend considerable time meeting collaborators and other stakeholders across the globe," the company said in response ET's request for comment. "They also visit facilities of SMG which are spread across 25 counties where they meet regional management and also interact with employees." With Europe being the main market, especially Germany, the Sehgals spend more time in there. Global business constitutes 85% of the turnover at SMG.

"Indian promoters are moving out of the country today to set up sales and marketing functions, make the organisation and the brand global. Europe is a preferred choice as it is a large automotive market and access to the EU opens up 28 countries at once," said Rajeev Singh, head of automotive practice at KPMG.

Apollo Tyres can be seen as a test case. VC Neeraj Kanwar had moved to the UK in 2013 to put final touches to buyout USbased Cooper Tires in a $2.5-bn deal. While that deal fell through, the relocation helped the company in more ways than one. Apollo Tyres today has a more diverse portfolio of investors and Kanwar cites his presence closer to the global investor community as an enabling factor. "Before, when I left for the UK, our investor base was more skewed towards Indian institutions... Today, Indian institutional investors have come down to 10-12%, international has gone up to 30-35%," he said.